HomeMy WebLinkAboutStaff Report 11252City of Palo Alto (ID # 11252)
Finance Committee Staff Report
Report Type: Action Items Meeting Date: 4/21/2020
City of Palo Alto Page 1
Summary Title: Storm Water Management Fee Increase for FY2021
Title: Adoption of a Resolution Amending Utility Rate Schedule D-1 (Storm
and Surface Water Drainage) Increasing the Storm Water Management Fee
by 2.5 Percent to $15.04 Per Month Per Equivalent Residential Unit for Fiscal
Year (FY) 2021
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that the Finance Committee recommend that Council adopt the attached
resolution (Attachment A) amending Utility Rate Schedule D-1 (Storm and Surface Water
Drainage), to implement a 2.5% rate increase consistent with the applicable Consumer Price
Index, increasing the monthly charge per Equivalent Residential Unit by $0.36, from $14.68 to
$15.04 for Fiscal Year 2021.
Background
On April 11, 2017, a majority of Palo Alto property owners approved a ballot measure
authorizing a monthly Storm Water Management Fee to fund storm drain capital improvement
projects, enhanced maintenance of the storm drain system, storm water quality protection
programs and more. Council certified the results of the ballot proceeding on April 17, 2017. The
approved ballot measure contained an annual fee escalator clause that permits the Council to
consider raising the Storm Water Management Fee each year to account for inflationary cost
increases. Specifically, the ballot measure stated that:
“In order to offset the effects of inflation on labor and material costs, the maximum rate for the
Storm Water Management Fee (and each component of the Storm Water Management Fee)
will be increased annually each July 1 (beginning July 1, 2018), by the lesser of (i) the
percentage change in the Consumer Price Index [CPI] for the San Francisco-Oakland-San Jose
CSMA, published by the United States Department of Labor, Bureau of Labor Statistics during
the prior calendar year or (ii) 6%. The City Council would have the authority to set the rate for
the Storm Water Management Fee (and each component of the Storm Water Management
Fee) at any rate that is less than or equal to the inflation adjusted maximum rate.”
City of Palo Alto Page 2
On June 17, 2019, Council adopted a resolution to implement the Storm Water Management
Fee to be $14.68 per month per Equivalent Residential Unit (ERU), effective July 1, 2019.
Discussion
Staff has determined from Bureau of Labor Statistics records that the local CPI for the San
Francisco-Oakland-San Jose CMSA increased by 2.5% between December 2018 and December
2019. As the CPI rate is substantially lower than 6%, consistent with the ballot measure, staff
recommends that the Storm Water Management Fee be increased by the CPI in order to keep
fund revenues consistent with general cost increases and to provide sufficient funds for
planned storm water management capital and operating expenditures. To enact the Storm
Water Management Fee increase, Council must adopt the attached resolution amending Utility
Rate Schedule D-1 (Storm and Surface Water Drainage). The new rate for the Storm Water
Management Fee will be $15.04 per month per ERU. Single-family residential properties are
billed a monthly amount based on parcel size, in accordance with the following table:
RESIDENTIAL RATES (Single-Family Residential Properties)
PARCEL SIZE (sq.ft.)ERU
< 6,000 sq.ft.0.8 ERU
6,000-11,000 sq.ft.1.0 ERU
> 11,000 sq.ft.1.4 ERU
Commercial, industrial, institutional, and multi-family residential properties are billed monthly
at a rate of 1.0 ERU for each 2,500 square feet of impervious surface on the parcel.
Timeline
The Storm Water Management Fee increase will take effect on July 1, 2020.
Resource Impact
The 2.5%increase in rates is expected to increase annual revenue to the Storm Water
Management Fund by $186,000,and if appproved will be reflected in the Public Works
Department Storm Water Management Fund FY 2021 operating budget revenue.
Stakeholder Engagement
Staff presented the 2.5%rate increase to the Storm Water Management Oversight Committee
as a preliminary proposed base budget item for the development of the Fiscal Year 2021 Storm
Water Management Fund operating budget.The Committee consists of seven members from
the public and was established to review proposed storm water management capital
improvements and operating programs to be funded from the Storm Water Management Fees
and to monitor expenditures of the fund.
Environmental Review
The adoption of this change to the Storm Water Management Fee to meet operating expenses,
purchase supplies and materials, meet financial reserve needs and obtain funds for capital
City of Palo Alto Page 3
improvements necessary to maintain service is not subject to the California Environmental
Quality Act (CEQA), pursuant to California Public Resources Code Sec. 21080(b)(8) and Title 14
of the California Code of Regulations Sec. 15273(a).
Attachments:
·Resolution Amending Utility Rate Schedule D-1 (Storm and Surface Water Drainage)
NOT YET APPROVED
6055362 1
Resolution No. ______
Resolution of the Council of the City of Palo Alto Amending Utility Rate
Schedule D-1 (Storm and Surface Water Drainage) Increasing thee
Storm Water Management Fee by 2.5% to $15.04 Per Month Per
Equivalent Residential Unit for Fiscal Year 2021
The Council of the City of Palo Alto RESOLVES as follows:
SECTION 1. Pursuant to Section 12.20.010 of the Palo Alto Municipal Code, Utility
Rate Schedule D-1 (Storm and Surface Water Drainage) is hereby amended to read in accordance
with sheet D-1-1, attached hereto and incorporated herein. The foregoing Utility Rate Schedule,
as amended, shall become effective July 1, 2020.
SECTION 2. The Council finds that this rate increase is being imposed to offset the
effects of inflation on labor and material costs pursuant to the annual inflationary fee escalator
provision of the Storm Water Management Fee ballot measure, which was approved by a
majority of Palo Alto property owners on April 11, 2017.
SECTION 3. The Council finds that the revenue derived from the authorized adoption
enumerated herein shall be used only for the purpose set forth in Article VII, Section 2, of the
Charter of the City of Palo Alto.
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NOT YET APPROVED
6055362 2
SECTION 4. The Council finds that the adoption of this resolution changing the Storm
Water Management Fee to meet operating expenses, purchase supplies and materials, meet
financial reserve needs and obtain funds for capital improvements necessary to maintain service
is not subject to the California Environmental Quality Act (CEQA), pursuant to California Public
Resources Code Sec. 21080(b)(8) and Title 14 of the California Code of Regulations Sec. 15273(a).
After reviewing the staff report and all attachments presented to Council, the Council
incorporates these documents herein and finds that sufficient evidence has been presented
setting forth with specificity the basis for this claim of CEQA exemption.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ _____________________________
Assistant. City Attorney City Manager
_____________________________
Director of Public Works
_____________________________
Director of Administrative
Services
GENERAL STORM AND SURFACE WATER DRAINAGE
UTILITY RATE SCHEDULE D-1
CITY OF PALO ALTO UTILITIES Issued by the City Council
Effective 7-1-2020
Supersedes Sheet No.D-1-1 dated 7-1-2019 Sheet No. D-1-1
A. APPLICABILITY: This schedule applies to all Storm and Surface Water Drainage Service, excepting only those
users and to the extent that they are constitutionally exempt under the Constitution of the
State of California or who are determined to be exempt pursuant to Rule and Regulation 25. B. TERRITORY: Inside the incorporated limits of the city of Palo Alto and land owned or leased by the City. C. RATES: Per Month:
Storm Drainage Fee per Equivalent Residential Unit (ERU) ............................................ $15.04
D. SPECIAL NOTES: 1. An Equivalent Residential Unit (ERU) is the basic unit for computation of storm
drainage fees for residential and non-residential Customers. All single-family
residential properties shall be billed the number of ERUs specified in the following
table, based on an analysis of the relationship between impervious area and lot size for
Palo Alto properties.
RESIDENTIAL RATES (Single-Family Residential Properties
PARCEL SIZE (sq.ft.) ERU
<6,000 sq.ft. 0.8 ERU
6,000 - 11,000 sq.ft. 1.0 ERU
>11,000 sq.ft. 1.4 ERU
All other properties will have ERU's computed to the nearest 1/10 ERU using the
following formula: No. of ERU = Impervious Area (Sq. Ft.)
2,500 Sq. Ft. 2. For more details on the Storm Drainage Fee, refer to Utilities Rule and Regulation 25.
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